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CIPS – Commercial Contracting (L4M3) paper 7.
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1.
Which of the following describes a benefit of using input specifications?
2.
How should a buyer ensure ethical compliance when negotiating international contracts?
3.
When preparing tender specifications with social and environmental criteria, the approach should be:
4.
Why are key performance indicators (KPIs) essential for supplier performance management?
5.
What is the Vienna Convention primarily concerned with?
6.
What does the term "quantum meruit" mean?
7.
What type of clause represents an honest pre-assessment of losses in case of breach?
8.
What model form contract would suit an automotive company seeking a global supplier for car lift installation?
9.
When a supplier and buyer exchange documents with conflicting terms, this situation is referred to as:
10.
Which is a drawback of using performance specifications?
11.
What defines a conformance specification?
12.
An effective KPI should be:
13.
Why are framework agreements beneficial in procurement for dynamic markets?
14.
Key performance indicators are used to.
15.
What does "Caveat Emptor" mean in procurement?
16.
Which specification type is best for innovation and collaboration in product development?
17.
What are the five fundamental elements of a legally binding contract?
18.
A construction company plans to engage a principal contractor to build a new hotel using a standard model form of contract. What is a key benefit of utilizing this approach?
19.
What accurately describes a legal contract?
20.
Dexis Ltd intends to invite bids from as many suppliers as possible for a variety of components. They prefer an unrestricted tendering process. Which option suits their needs best?
21.
Goers Co. Ltd, striving for competitive market positioning, seeks to encourage suppliers to propose cost-saving measures within contracts. Which pricing strategy aligns best with their goals?
22.
A procurement manager issues a Request for Quotation (RFQ) for a specialized product designed in-house. Since the company lacks the ability to produce the item internally, they require the supplier to adhere to detailed specifications. Was using a conformance specification appropriate?
23.
A supplier experiencing cash flow challenges requests a reduction in payment terms from 60 days to 45 days. The procurement manager agrees but negotiates a 5% discount as a condition. Was this an appropriate decision?
24.
In an RFQ for a research project, a buyer requests a cost-plus pricing model. Is this a sound strategy?
25.
In what scenarios is a fixed-price contract ideal?
1. When the scope of the project is clearly defined and reliable.
2. When the supplier lacks prior experience in the activity.
3. When labor and material costs can be accurately estimated.
4. When incentives for early completion are implemented.
26.
For a contract to be valid and enforceable, specific fundamental elements must be present. Identify the three essential components:
a. An agreement must exist, comprising an offer and its acceptance.
b. Monetary exchange must occur at the time the contract is made.
c. There must be an intention to establish legal relations.
d. All involved parties must have the capacity to enter into a contract.
e. A request for quotation must be received within the appropriate timeframe.
f. The option to make counteroffers must be available.
27.
Supplier performance is often tracked using Key Performance Indicators (KPIs). Identify the most relevant ones:
a. Cost management
b. On-time delivery performance
c. Supplier staff attendance
d. Quality compliance
e. Negotiation effectiveness
f. Contract uniformity
28.
Contracts typically include certain terms by default. Which terms are integral to every agreement? Select TWO:
29.
In the creation of contract, identify two types of contract term that will always form part of the contract
30.
Mjengo Construction faced delays in completing new premises for Peris Holdings Ltd due to labor shortages. The project was three months late, and the contract included this clause:"Mjengo Construction must compensate Peris Holdings 3% of the contract value for every calendar month of delay." Peris Holdings demands 9% of the contract value as compensation. Should Mjengo Construction comply?
